Gontarchick v. City of Pottsville
608 Pa. 1
Pa.2010Background
- Police officers Gontarchick and Reed retired from Pottsville after >20 years and applied for police-pension benefits under the Third Class City Code.
- Pension benefits were calculated using a twelve-month averaging method, then halved to determine monthly benefits, despite demands based on the last-month rate.
- Appellants argued Section 4303 requires base on the retiring officer's actual last-month gross compensation (rate of monthly pay).
- The Commonwealth Court upheld the City's twelve-month averaging method as a reasonable reading of Section 4303; the trial court had ruled for Appellants.
- Pennsylvania Supreme Court analyzed whether Section 4303 is ambiguous and whether averaging comports with statutory construction principles.
- The Court ultimately affirmed the Commonwealth Court and held that twelve-month averaging is a reasonable construction to avoid arbitrariness and manipulation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §4303 unambiguously requires last-month pay. | Gontarchick argues last month rate governs; statute unambiguous. | City argues 'rate of monthly pay' implies an average over time. | §4303 ambiguous; not plainly last-month pay. |
| Whether a twelve-month average is a permissible method under §4303. | Appellants contend averaging is impermissible and ignores last month. | City maintains averaging is a reasonable construction to prevent manipulation. | Twelve-month averaging is a reasonable construction. |
| Whether the Court should liberally construe police-pension provisions in favor of beneficiaries. | Statutes construed liberally for beneficiaries; last-month rate required. | Balance public interests and avoid arbitrary results; flexible construction allowed. | Court favors liberal construction to the extent consistent with avoiding arbitrariness. |
| Whether other authorities support the City's method to ensure fund administration reliability. | Aiming for exact last-month pay aligns with contemporaneous compensation. | Averaging reduces variability and protects pension system integrity. | Better to apply twelve-month averaging for stability and fairness. |
Key Cases Cited
- Borough of Nazareth v. Nazareth Borough Police Association, 545 Pa. 85 (1996) (inclusion of overtime in pension calculations appropriate where pension contributions deducted)
- Kosey v. City of Washington Police Pension Board, 73 Pa. Cmwlth. 564 (1983) (12-month averaging used in certain pension calculations)
- City of Lower Burrell v. City of Lower Burrell Wage and Policy Committee, 795 A.2d 432 (Pa. Cmwlth. 2002) (supports use of annual average rate in pension calculations)
- Borough of Nazareth, 545 Pa. 85, 680 A.2d 830 (1996) (economic considerations in pension computations; context for Nazareth ruling)
- DPW v. WCAB (Harvey), Pa. _, 993 A.2d 270 (2010) (statutory-interpretation framework for public-employee compensation)
- Crouse v. DGS, 529 Pa. 26, 601 A.2d 789 (1992) (liberal construction of social legislation in beneficiaries' favor)